Growth in earnings per share is everything. The expected future growth in earnings per share (“EPS”) is an incredibly important factor in identifying an under-valued stock. The impact of earnings growth is exponential. Over the long run, the price of a stock will generally go up in lock step with its earnings (assuming the P/E ratio is constant). Therefore stocks with higher earnings growth should offer the highest capital gains. And doubling the growth more than doubles the capital gain, due to the compounding effect.
Given the importance of identifying companies that will grow earnings per share at high rate, we then need to consider how to identify which companies will achieve high growth rates. One obvious way to identify high earnings per share growth companies is to find companies that have demonstrated such growth over the past 5 to 10 years. We can’t assume the past will always reflect the future, but logically stocks that have grown earnings per share strongly in the past are a good bet to continue to do so.
General Motors Company (NYSE:GM) traded at a yearly high level of $38.55 during the last trading session. The last session’s volume of 13.54 million shares was higher than its average volume of 12.84 million shares. The stock, after opening at $33.90, closed at $33.42 by scoring -1.18%. The total market capitalization remained at $50.73 billion.
General Motors Company (NYSE:GM) have shown a high EPS growth of 5.60% in the last 5 years and has earnings growth of 37.70% yoy. Analysts have a mean recommendation of 2.60 on this stock (A rating of less than 2 means buy, “hold” within the 3 range, “sell” within the 4 range, and “strong sell” within the 5 range). The stock appeared -12.42% below its 52-week highs and is down -2.45% for the last five trades.
Baozun Inc (ADR) (NASDAQ:BZUN), after opening at $20.50, closed at $22.78 by scoring 14.70%. The overall volume in the last trading session was 4.56 million shares, versus the average volume of 1.20 million shares.
Analysts gives Baozun Inc (ADR) (NASDAQ:BZUN) a mean recommendation of 1.80. The company has grown 48.11% in past 3 months and in the last five trades has moved up 18.09%. The stock has earnings growth of 332.60% yoy. Shares are trading 44.38% above their 50-day moving average, and 61.82% below their 200-day moving average.
Akamai Technologies, Inc. (NASDAQ:AKAM) stock price declined -1.36% to finalize at $49.15 throughout previous buying and selling session. A total of 2.78 million shares exchanged hands as contrast to its average trading volume of 2.94 million shares.
Akamai Technologies, Inc. (NASDAQ:AKAM) was trading -31.39% below its 52-week high and +2.82% above its 52-week low. Its last 5-Year EPS growth stands at 10.90% with earnings growth of 9.60% yoy. The stock showed weekly downbeat performance of -2.48%, which was maintained for the month at -16.44%. Likewise, the negative performance for the quarter was recorded as -22.66% and for the year was -4.30%, while the YTD performance remained at -26.29%. The company is set at a mean analysts’ recommendation of 2.50.